2026 Tennessee Law Changes for Property Owners and Businesses

Each spring the Tennessee General Assembly changes rules for buying, building, licensing, and running a business, and many of the changes take effect on July 1. A document or practice that worked last year can now fall short. Below are the 2026 changes most likely to matter to property owners, contractors, real estate licensees, and small businesses.

Recording a real estate contract now takes more

Tennessee lets agreements to convey real estate be registered with the register of deeds. A registered document is notice to all the world (Tenn. Code Ann. § 66-26-102). Since April 27, 2026, an agreement for the conveyance of real property, or a contract, memorandum, abstract, or affidavit for the sale of real property, by whatever name, may be registered only if it contains:

• the signatures of the owner (or the owner's attorney-in-fact or court-appointed representative) and the proposed purchaser, all authenticated under § 66-22-101; and
• the expiration date of the agreement, stated by day, month, and year.

Bonds for conveyance must likewise carry the authenticated signatures of all parties and an expiration date. Separately, an affidavit presented for registration under § 66-24-101 generally must be sworn before a notary public and include a statutory jurat (2026 Tenn. Pub. Acts ch. 865, amending Tenn. Code Ann. § 66-24-101(a)(1), adding (a)(29) and (g)).

This affects buyers and sellers under land contracts, wholesalers who record a memorandum or affidavit of interest, and anyone correcting a deed by affidavit, and it may affect holders of recorded options and rights of first refusal. The act does not say how an expiration date works for a long-term land contract, and I am not aware of a Tennessee appellate decision applying the change yet. See owner financing and land contracts, rights of first refusal and options, and assignment of contract and wholesaling.

Construction repose no longer cuts off counterclaims and third-party claims

Tennessee's statute of repose generally requires suits over a deficiency in the design or construction of an improvement to real property to be brought within four years after substantial completion. Since July 1, 2026, that limit does not apply to actions brought under § 28-1-114(a) (2026 Tenn. Pub. Acts ch. 684, amending Tenn. Code Ann. § 28-3-202). Section 28-1-114(a) allows a counterclaim, cross-claim, or third-party complaint that was not barred when the claims in the original complaint were filed.

This affects owners, builders, subcontractors, and designers. A builder sued near the end of the repose period may now be able to bring in a subcontractor or designer after the four years have run. The act does not address suits already pending on July 1, 2026, and I am not aware of an appellate decision applying it yet. See construction defect claims in Tennessee.

Contractor licensing: total cost defined, and a bond option

Generally, a contractor must be licensed for a construction undertaking whose total cost is $25,000 or more (Tenn. Code Ann. §§ 62-6-102, -103). Since July 1, 2026, the statute defines total cost as the aggregate value of all labor, materials, equipment, subcontracted work, overhead, profit, and other expenses of the project, regardless of whether the owner, contractor, subcontractor, or anyone else pays them, and regardless of whether the work is done under one contract or several (2026 Tenn. Pub. Acts ch. 1039, § 23, amending Tenn. Code Ann. § 62-6-102).

The same act lets a license applicant post a surety bond of at least 50 percent of the requested monetary limitation instead of providing a financial statement. A person damaged by the contractor's breach of a construction contract may sue on the bond directly, and the license becomes invalid if the bond lapses (2026 Tenn. Pub. Acts ch. 1039, §§ 24, 25, 27, 28, amending Tenn. Code Ann. §§ 62-6-111(b), (k), 62-6-116(c), (d)). This affects contractors and the owners who hire them. See construction defect claims.

Real estate licensees: offices, notices, and convictions

Public Chapter 1039 also amended the Real Estate Broker License Act, effective July 1, 2026:

• Offices and signs: the Broker License Act no longer requires a firm's office to be located to conform with zoning laws, the written zoning verification on application or change of location is gone, and the outside sign no longer must state that the broker is in the real estate business. The act does not change local zoning itself, and the sign is still required (amending Tenn. Code Ann. § 62-13-309).
• Complaint notices: notices and answers may be served personally, by email if the licensee has an email address on file with the Commission, or by first-class mail, and time runs from service if personal or by email. The text still refers to the postmark "if by registered mail," a method no longer listed (amending § 62-13-313(b)).
• Convictions: the conviction ground now names violent offenses and crimes requiring sex offender registration. Section 62-13-312(f) already required a licensee who pleads guilty or is convicted to notify the Commission within 60 days; it now refers to the guilty plea as well as the conviction, so the notice, the certified copies, and the 60-day automatic revocation also run from a guilty plea (amending § 62-13-312(b)(12), (f)).
• Brokers and expired licenses: a new broker now has four years, not three, to complete the additional 120 hours of education, and a license expired more than one year (previously two) may be reactivated with the penalty and a 30-hour course (amending §§ 62-13-303(h), -319(c)).

All of these come from 2026 Tenn. Pub. Acts ch. 1039, §§ 39-47. For the complaint process, see what to do first after a TREC complaint arrives and what the Tennessee Real Estate Commission can and cannot do.

Contracts that mix goods and services

Tennessee adopted the Uniform Law Commission's 2018 and 2022 amendments to the Uniform Commercial Code, effective July 1, 2026. Three changes matter most to businesses:

• Hybrid transactions: a single transaction involving a sale of goods plus services, a lease of other goods, or a sale, lease, or license of other property. If the goods aspects predominate, Article 2 applies, though other law may govern the non-goods aspects. If they do not, only the Article 2 provisions relating primarily to the goods aspects apply (2026 Tenn. Pub. Acts ch. 704, §§ 12-13, amending Tenn. Code Ann. §§ 47-2-102, -106).
• Conspicuous terms: the definition now asks whether, based on the totality of the circumstances, a reasonable person ought to have noticed the term. The old list of examples, such as headings in capitals, is gone. That matters for warranty disclaimers, which must be conspicuous (2026 Tenn. Pub. Acts ch. 704, § 1, amending § 47-1-201(b)(11)).
• Controllable electronic records: a new chapter governs electronic records that can be subjected to control as the act defines it (2026 Tenn. Pub. Acts ch. 704, § 124, adding Tenn. Code Ann. § 47-6-101 et seq.).

Transactions validly entered into before July 1, 2026 generally continue under the prior law (§ 47-1A-201). This affects businesses that sell goods together with installation or other services. See vendor agreements in Tennessee.

Final pay for commission and piece-work employees

Tennessee's wage payment statute requires an employee who leaves or is discharged to be paid in full by the next regular payday or 21 days after leaving, whichever is later. For wages and compensation earned on or after July 1, 2026, an employee paid on a piece-work or commission basis must instead be paid that compensation by the last day of the month following the separation. A parallel change applies to employers that pay monthly (2026 Tenn. Pub. Acts ch. 617, amending Tenn. Code Ann. § 50-2-103(a)(2), (g)).

This affects employers that pay commissions or piece rates and their employees, including when a business is sold. See asset purchase agreements in Tennessee.

The family-owned entity exemption from franchise and excise tax

Tennessee exempts a family-owned noncorporate entity from franchise and excise tax when substantially all of its activity is producing passive investment income, such as rents from certain residential or farm property, alone or combined with farming. Since July 1, 2026, family-owned means that at least 95 percent of the voting rights, capital interest, or profits are owned by relatives, by trusts for the benefit of relatives, or by the estate of a deceased relative. Relatives include people related by blood or adoption as first cousins or closer, and their spouses, former spouses, and those spouses' lineal descendants. The old rule did not count interests held in trust unless the trust was that of a deceased family member (2026 Tenn. Pub. Acts ch. 616, §§ 17-18, amending Tenn. Code Ann. § 67-4-2008(a)(11)(B)).

This affects families who hold rental or farm property in an LLC or another noncorporate entity, especially where interests are held in trusts. The act does not address an LLC that has elected S corporation status. Your CPA can confirm how the definition applies. See S corporation elections in Tennessee.

Earlier changes still worth knowing

• Wage and commission claims (2024): a claim for unpaid wages, salary, bonuses, commissions, or other compensation owed to an employee or independent contractor must be brought within three years after the claim accrues, even when framed as breach of contract, unjust enrichment, or quantum meruit, for causes of action arising on or after July 1, 2024 (2024 Tenn. Pub. Acts ch. 747, adding Tenn. Code Ann. § 28-3-105(4)). See breach of contract claims.
• Administrative dissolution (2025): since April 3, 2025, the Secretary of State may administratively dissolve a corporation or LLC that is owned or controlled by a foreign adversary designated by the U.S. Secretary of Commerce (unless the transaction was approved by the Committee on Foreign Investment in the United States), or that files a document its signer knew contained materially false information. The false-filing ground is new for corporations; LLC law already had a similar ground, which the act restated (2025 Tenn. Pub. Acts ch. 113, amending Tenn. Code Ann. §§ 48-24-201, 48-249-604). See dissolving an LLC.
• Foreclosure notice (2025): since July 1, 2025, a foreclosure sale must be advertised at least twice in a county newspaper, with the first notice at least 20 days before the sale, and posted online by a third-party internet posting company for at least 20 continuous days. The prior law required three newspaper notices (2025 Tenn. Pub. Acts ch. 515, amending Tenn. Code Ann. § 35-5-101).
• Older-persons housing (2023): in federally assisted housing for older persons, a landlord ending the tenancy of a tenant aged 55 or older who is current on rent, in order to raze the facility or convert it to market-rate housing, must give 60 days' notice. This applies to leases entered into, amended, or renewed on or after July 1, 2023 (2023 Tenn. Pub. Acts ch. 400, amending Tenn. Code Ann. § 66-7-109 and Title 66, Chapter 28, Part 5). See eviction defense for tenants.

A change in the statute does not update the forms people keep reusing. Before you sign or record a contract, memorandum, or affidavit, or put a commission plan or form agreement into use under these rules, my office can review the document before you sign it against the current law.

Educational disclaimer: This article provides general Tennessee educational information only and is not legal or tax advice for any specific property, business, or transaction.